Asset Managers Remain in Early Stages of Adopting Disruptive Technologies, Accenture Report Finds

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Accenture's recent report reveals that while 95% of North American asset managers expect technology to be a competitive advantage by 2025, many are lagging in adopting transformative technologies like AI and cloud solutions. Only 8% have completed their cloud journey, and just 28% are experimenting with AI. The report indicates that 85% of executives believe a radical operational restructuring is necessary. Moreover, 91% intend to transform their product distribution by 2026, yet less than a third have implemented new tech platforms. The findings emphasize the urgency for firms to innovate to maintain competitiveness.

Positive

• 95% of asset managers believe technology will be a competitive differentiator by 2025.
• 83% of asset managers are looking to expand into new investment products.
• 91% intend to transform their product distribution value chain within the next five years.

Negative

• Only 8% of asset managers have completed their cloud journey.
• Less than one-third (28%) are experimenting with AI, indicating a lack of adoption.
• 85% believe they need to radically restructure operations but face challenges in achieving this.

While 95% of asset managers in North America believe that their technology, data and digital capabilities will be competitive differentiators by 2025, many remain in the early stages of adopting disruptive technologies, including artificial intelligence (AI) and cloud, according to a new report from Accenture (NYSE: ACN).

The report — “Inventing the Future of Asset Management” — is based on a survey of 250 senior asset-management executives in North America and includes respondents from 17 of the 25 largest asset managers globally. It notes that while cloud-native technology could provide asset managers with numerous benefits — helping them scale their businesses rapidly, lower costs, improve the customer experience and gain better access to data — only 8% of those surveyed have completed their cloud journeys.

Asset-management firms are also in the nascent stages of adopting AI – less than one-third (28%) are experimenting with the technology, 38% are deploying it across targeted business groups, and just 17% are in the more advanced stage of scaling AI across their organizations. Properly harnessing and applying AI will be critical for product development, alpha generation and delivering a differentiated customer experience, according to the report.

The report notes that asset managers’ product strategies are evolving faster than their ability to operationally adapt, putting pressure on firms to implement more flexible and scalable operations and technology. For instance, more than four in five (85%) asset managers believe they need to radically restructure and redefine their investment operations to focus more on competitive differentiators, including performance, client experience, and breadth of offerings.

“While asset managers are confident about reaching their strategic visions by 2025, operationally there’s a lot they need to achieve before that can happen,” said Mike Kerrigan, who leads Accenture’s North America Asset Management industry group. “Asset managers need to reimagine their operations; embrace cloud, AI, and data analytics to reduce costs; and, more importantly, create greater agility across their operating model and platform architecture. Getting there won’t happen overnight, so aligning capital investment, vendor partnerships and internal talent will be critical.”

The report notes that as alpha becomes more difficult to attain, it’s becoming more important for asset managers to create personalized products and services that can help improve the customer experience. To meet this need for personalization, four in five (83%) asset managers are looking to expand into new investment products and strategies, while three in four (74%) are considering expanding their products and services outside of investment products, including acting in advisory or consultative roles for investors, advisors and distribution partners.

The report also suggests that improving product distribution will be even more critical as asset managers increasingly consider selling directly to consumers. For instance, nine in 10 respondents (91%) said they intend to transform their product distribution value chain within the next five years. Although doing so will require new technology capabilities, according to the report, less than one-third (28%) of respondents said their firms have already implemented new technology platforms.

“The path forward for asset managers is clear, but whether they will have the right technology, data and operations capabilities in place by 2025 is the critical question,” said Girard Healy, a managing director in Accenture’s Asset Management industry group. “Firms need to determine whether their core competencies are really creating a competitive advantage in today’s marketplace. As product shelves across the industry get smaller, asset managers can’t assume that their brand or legacy reputation will carry enough weight in the battle for shelf space. The bar has been raised — firms need to double down on technology and investment capabilities, and create a meaningful experience to deliver 360-degree value for clients.”

The full report can be accessed here.

Methodology
Accenture conducted field research across the United States and Canada in late 2020 to better understand asset manager’s priorities for today, tomorrow and into 2025. Accenture surveyed 250 senior executives at asset managers — including institutional, retail, alternative and hedge funds — in North America. The survey featured 17 of the 25 largest asset managers globally. The executives were evenly aligned to one of seven business functions: investment management, operations, marketing & brand, technology, product, distribution, and strategy.

About Accenture
Accenture is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills across more than 40 industries, we offer Strategy and Consulting, Interactive, Technology and Operations services — all powered by the world’s largest network of Advanced Technology and Intelligent Operations centers. Our 537,000 people deliver on the promise of technology and human ingenuity every day, serving clients in more than 120 countries. We embrace the power of change to create value and shared success for our clients, people, shareholders, partners and communities. Visit us at www.accenture.com.

Accenture’s Capital Markets industry group helps wealth and asset managers, investment banks and exchanges rethink their business models, manage risk, redefine workplace strategies and improve operational efficiency to prepare for the digital future. To learn more, visit https://www.accenture.com/us-en/industries/capital-markets-index.

This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.

Copyright © 2021 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture

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FAQ

What does Accenture's report reveal about asset managers' technology adoption by 2025?

The report indicates that while 95% of asset managers believe technology will be a competitive advantage by 2025, many are still in the early stages of adopting technologies like AI and cloud.

How many asset managers have completed their cloud journey according to Accenture?

Only 8% of asset managers surveyed have completed their cloud journey, according to Accenture's report.

What percentage of asset managers are currently experimenting with AI?

The report states that less than one-third (28%) of asset managers are experimenting with AI.

What are asset managers planning regarding product distribution by 2026?

91% of asset managers indicated they intend to transform their product distribution value chain within the next five years.

What operational changes do asset managers believe are necessary?

85% of asset managers feel they need to radically restructure their operations to focus on competitive differentiators.